Can treasury take a strategic role in supply chain management?

An EIU report highlights some of the trends in supply chain management, including treasury's role – but it asks whether treasurers are ready to embrace the challenge of leading a supply chain?

A report called Rebooting supply chains by the Economist Intelligence Unit (EIU) highlights some of the trends in supply chain management, including an increased focus on costs, investment in technological innovation, supply chains becoming shorter (but not less complex) and treasury's important role in strategic supply chain management. The key findings from the survey include:

Most companies are confident about being able to deal with supply-chain disruptions over the next year, but they are very sensitive about costs.

Commitment to technological innovation is extraordinarily widespread in supply chain management. More than nine out of 10 (93 per cent) executives surveyed have identified it as important. Companies that believe innovation is very important are also more confident they can address external disruptions.

More companies (49 per cent) expect supply chains to become shorter and simpler in the next five years than those (33 per cent) who expect them to grow longer and more complex. Even so, some companies that expect to shorten their supply chains may increase their complexity in response to consumer preferences.

Companies rate core skills of the treasury function highly when it comes to managing supply chains in the future. But most companies still see treasurers in a governance role, rather than having a strategically important role for supply chains.

Is treasury ready to lead supply chain?

The report, based on a survey of more than 500 finance, procurement and supply chain professionals around the word, asks whether treasurers ready to embrace the challenge of leading a supply chain? Supporting the idea that corporate treasurers should play a greater role in strategic supply chain management, the report also found that:

42% of respondents say that their companies have increased collaboration among internal teams, such as finance and risk management;

68% of executives in the survey identified risk management as an important skill for managing their supply chain over the next five years;

63% say monitoring corporate cash flow will be important for strategic supply-chain management in five years;

however, less than a third of respondents (31 per cent) thought treasury would be regularly collaborating with business heads, despite the importance of its skill set.

The report sums up: “Business leaders clearly see a growing need for the expertise of treasury when it comes to the future of supply chains, but their vision of treasury’s role seems limited and stricken with unrealised potential.”

CTMfile take: Corporate treasurers – is this a fair representation of how you see your role as treasurer interacting with the management of your company's supply chain? Do you even want more influence over supply chain decisions?